What changed
The earlier interest subvention of 2% on rupee export credit, applicable from June 1, 2009 to September 30, 2009, has been extended for an additional six months. The new period runs from October 1, 2009 to March 31, 2010, covering the same specified export sectors and conditions.
What it means for you
Scheduled Urban Co-operative Banks holding AD Category I licences can continue offering concessional export credit at 2% below the normal rate for another six months. This supports export sector borrowers by reducing their financing costs, and banks must ensure compliance with the directive's terms to avail the subvention.
What you must do
- Update your lending systems to apply the 2% subvention on rupee export credit for the period October 1, 2009 to March 31, 2010.
- Verify that only eligible export sectors as specified in the earlier circular receive the concessional rate.
- Maintain documentation to demonstrate compliance with the directive's terms and conditions.
- Communicate the extension to your export credit customers and relevant branches.
Who it affects
Scheduled Urban Co-operative Banks holding AD Category I licences, Export sector borrowers availing rupee export credit from these banks
Which banks are covered by this circular?
Only Scheduled Urban Co-operative Banks that hold an AD Category I licence are eligible to offer the interest subvention on rupee export credit.
What is the new validity period for the subvention?
The 2% interest subvention is extended from October 1, 2009 to March 31, 2010, a total of six months.
Are the terms and conditions changed from the previous circular?
No, the subvention is extended on the same terms and conditions as specified in the earlier circular dated June 18, 2009.